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and since doing this and then refreshing the browser I noticed that the elements repositioned slightly. Is this related to the box model issue? I thought that this was all fixed in IE7.

The first doctype will put IE7 in quirks mode, since it doesn't contain a system identifier. In quirks mode IE7 uses the broken box model.

The second one will put IE7 in 'standards' mode, where it will use the correct box model.

Originally Posted by Tryst

Or does the fact that I included a namespace in <html> tag do something?

No, IE7 doesn't support XHTML. If you see anything at all (rather than being asked to download the page) you're serving your document as text/html, which means it's interpreted as invalid HTML instead of XHTML. The xmlns attribute is invalid in HTML, so browsers will just ignore it.

Originally Posted by Tryst

Just confused as to what the main differences are between the two posted above.

Aside from the quirks/standards mode issues, there's a world of difference. The first one says you're using HTML 4.0 Transitional, the second says XHTML 1.0 Strict. See the XHTML vs HTML FAQ for details.

If you're going to use an XHTML doctype, you must make sure ASP.NET outputs well-formed XML markup. Even if you serve it as HTML, it must still work when served as XHTML.